STANDARD Chartered chief executive Peter Sands yesterday became the first candidate to definitively rule himself out of the race to succeed Mervyn King, Bank of England governor.
His appearance on the scene and exit leaves only two bankers as possible successors to King, whose final term as governor ends in June 2013.
The timeline leaves David Cameron and George Osborne little time to decide how they will fill the job.
Traditionally, the governor has been appointed by the Prime Minister and chancellor, often with a nod from the cabinet. Former chancellor Alistair Darling promised to change the process by advertising the job publicly, but the new government is not bound by his decision.
Whatever the method, David Cameron and Osborne will be left with the final say-so, but they are likely to take the views of senior City figures into account alongside political imperatives. So who are the runners and riders for the job?
• Bank deputy governor Paul Tucker is the clear favourite and therefore could be a “safe” choice. Despite having served under King during his time in charge during the financial crisis, Tucker has managed to distance himself from him and receives cautiously positive feedback from bankers.
• FSA chairman Lord Adair Turner has spent much time setting out his stall but is unpopular in the City.
• Former chair of the Independent Commission on Banking (ICB) and economist John Vickers has won favour by developing a banking policy framework that got the coalition out of a sticky spot. But much of the heavy lifting was left to the Treasury and his reforms are widely disliked in the City.
• Former Barclays chief executive John Varley’s leadership of Project Merlin, an attempt to broker a truce between banks and politicians, was widely seen as a manoeuvre positioning him for a senior regulatory role or honour. But Merlin’s perceived failure and the stigma of having been a well-paid Barclays CEO make his chances slim.
• Former HSBC chairman and chief executive Stephen Green is the best-positioned of any banker, since his bank did not require a rescue and he has now taken a job as trade minister. But he sits in the House of Lords as a Tory, meaning his independence could be questioned.
• Gus O’Donnell, the former head of the civil service, known by initials as “GOD”, spent over three decades in government jobs, including a stint representing the UK at the IMF and World Bank. But his previous closeness to Gordon Brown could rule him out – and a Treasury and civil service man overseeing the Bank would be radical.
• Commercial secretary to the Treasury Lord James Sassoon was tipped in a recent book about the Bank, but his career as a Tory could put his independence under scrutiny.